Microsoft brings Windows Azure, Office 365 to China

Microsoft said Thursday it would bring its Office 365 and Windows Azure to China as part of the company's strategy to expand its cloud services to enterprise customers in the country.

Both Office 365 and Windows Azure will be offered through Beijing-based 21Vianet, according to a company blog post. Microsoft has signed an agreement to license the technologies to the Internet data center service provider.

The services will be hosted in a 21Vianet data center in Shanghai, making it subject to Chinese laws. But Chinese customers can also use Office 365 and Windows Azure directly from Microsoft through its data centers in Singapore and Hong Kong.

Microsoft also said the Shanghai government would adopt both Office 365 and Windows Azure services from 21Vianet.

The U.S. company has made the announcement after it said in September that it was expanding in China, with new hires and more investment in research. Office 365, which offers online access to Microsoft Office products, and Windows Azure, a platform to develop and deploy applications, are two major products the company is aiming to promote with its new expansion in the country.

China is increasingly becoming a vital market for tech companies, because of its 538 million Internet users and its ranking as the world's largest market for PC and smartphone shipments. Microsoft, for years, has tried to tap into this market, but has faced obstacles on account of the country's rampant software piracy, where bootleg copies of Microsoft Office can be easily found in street markets.

A move by business users to Internet-based cloud services could help Microsoft maneuver around China's piracy problem. Both Office 365 and Windows Azures work as online services that charge monthly subscription fees. Last week, Microsoft also said it would not sell physical boxes of Windows 8 in China, and will instead only sell the software through online downloads and pre-installs on new devices.

Thursday's announcement also comes as Microsoft has seen growing progress in Chinese government offices using licensed version of its software. Earlier this year, authorities said they had spent US$160 million to buy licensed software products for its central and provincial government offices. Much of that software was from foreign vendors.

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